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Use the following information for the next TWO questions. Brown Company makes four products in a single facility. These products have the following unit product
Use the following information for the next TWO questions. Brown Company makes four products in a single facility. These products have the following unit product and period costs: Selling price per unit Direct materials per unit Direct labor per unit Variable manufacturing overhead per unit Variable selling per unit Total variable cost per unit Contribution margin per unit Fixed manufacturing overhead per unit Net income per unit A $78.70 $15.60 17.60 4.40 2.60 40.20 38.50 27.50 $11.00 B $71.10 $19.50 21.00 5.60 3.10 4 9.20 21.90 14.40 $7.50 C $67.90 $12.50 15.40 8.10 2.80 38.80 29.10 14.50 $14.60 D $62.60 $15.20 9.40 5.10 3.50 33.20 29.40 23.90 $5.50 Grinding hours per unit Monthly demand in units 2.00 3,000 1.100 .70 2,000 2,000 0.30 4.000 The grinding machine hours are the constraint for the production facility. A total of 10,500 hours are available per month on these machines. Direct labor is a variable cost in this company. 5. How many hours of grinding machine time would be required to satisfy demand for all four products? a. 10,500 b. 10,700 c. 11.000 d. 10,800 6. What product makes the MOST profitable use of the grinding machines? a. Product A b. Product B c. Product C d. Product D e. Either Product A or Product C
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